An overview of Excel spreadsheet

In the simplest of terms, Excel is a spreadsheet software application that can be utilized for the purposes of manipulating, organizing, and storing specific data. It is a rectangular shaped table which is comprised of vertical columns labeled with letters from the English alphabet and horizontal rows labeled numerically. The alphabetically labeled columns ascend in order from top to bottom whereas the rows ascend in order from left to right.

If more than 26 columns are needed, then the alpha labeling is doubled. In other words, where the first column is labeled as “A”, the 27th column is labeled as “AA.” Needless to say, as an accounting, budget-tracking, or charting tool, Microsoft Excel is an invaluable tool available to anyone, whether for business or home purposes. It provides you with a means of monitoring financial growth as well as other activities such as home budgeting.

8 steps to developing your budget using Excel spreadsheet

If anything, Excel spreadsheet is by far the most honest and simplest accounting systems that you can utilize. Here are the 8 steps you need to take when using this software application to create a budget for your business or household:

Track your monthly spending and save all your invoices and receipts – meaning all fixed monthly expenditure documentation (e.g. loan payments, utility bills, etc.) and try to establish what you spend on entertainment and food. Keep in mind that unforeseen expenses happen when you least expect it so add roughly another 10% of the total of the above to cover that.

Record this on paper – categorization and organization is the key here.

Don’t complicate things – start as simple as you can because you can always make corrections because columns and rows can always be altered when you are in the process of setting up your budget. Make sure that you have created columns for all expenditure including for what you actually spent versus what the estimate was as well as the gain or loss that resulted.

Finalize the labeling or titling of your columns and rows – double check and make sure that you have left no stone unturned.

Begin entering your data and learn the formulas necessary to calculate monetary totals – once you learn this, it is a real time saver. There is a help index so you can learn the different formulas involved for the 4 basic math functions.

Calculate your totals for a one-year period – divide each total by 12 in order to establish what the monthly average expenditure is for each category.

Save your Excel spreadsheet budget to your computer and assign it a file name – you just went to a lot of trouble to create and develop your business or family budget so protect that data by saving it to your hard drive.

Keep your records current – as tedious as this is, always make sure that you have listed things as accurately as possible. Omissions can cause financial inconveniences and even have disastrous consequences if you aren’t careful.